Synopsis: On July 10, 2009, the Obama Administration delivered the "Investor Protection Act of 2009" to Congress. If enacted, the proposed legislation would grant the SEC authority to impose additional fiduciary duties on broker-dealers and investment advisers. The additional fiduciary duties would require broker-dealers and investment advisers “to act solely in the interest of the customer or client without regard to the financial or other interest” of such broker-dealer or investment adviser. The proposed legislation also would grant the SEC the authority to prohibit financial intermediary “sales practices, conflicts of interest and compensation schemes” considered contrary to the public interest, as well as the authority to impose limitations on the use of mandatory arbitration clauses in certain broker-dealer and investment advisory agreements. The full text of the official proposal is available here.
Status: The proposed legislation was delivered to Congress on July 10, 2009 and is currently under consideration.